Equity Futures Recover Ahead of Housing Data & PPI
Yesterday’s global sell-off caused the S&P 500 to lose 2.43% in a single day, its worst performance in six weeks. Thankfully, US markets are looking up this morning, following broad-based market recovery across Asia and Europe. In the US, it helps that Q2 losses from Home Depot were also more moderate than expected, due to cost-cutting.
Markets have to digest two bits of data at 8:30 before we know if they’ll maintain that optimism and open higher. Producer Prices can be ignored unless there is a big surprise, as the more-important consumer price index was released last week. Attention will instead be on the Housing Starts & Building Permits report, which should advance for the third straight month. With a consumer-led recovery dependent on improvement in the housing market, a downside surprise could certainly dampen the optimism.
Sentiment in the housing market was boosted somewhat yesterday when the NAHB survey of homebuilder confidence edged up one point to its highest level since in 14 months.
In headlines this morning, former Federal Reserve chairman said he believes the economy should see a decent recovery in 2009 but that it wouldn’t be sustainable into next year.
“I think we're OK for the next six months,” Greenspan said in an interview with Reuters. “We are getting a recovery in (housing) starts and motor vehicles, but the process doesn't have legs to it.”
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